By: Tushar Gurjal, Senior Policy Manager

August 14, 2026 – On August 5, NAHRO submitted comments in response to a notice published in the Federal Register titled “Section 8 Housing Assistance Payments Program-Fiscal Year (FY) 2026 Inflation Factors for Public Housing Agency (PHA) Renewal.” In its notice, the Department sought feedback on “. . . potential [Renewal Funding Inflation Factor] methodological changes it is considering for FY 2027 which would incorporate an additional factor to partially adjust the local inflation adjustment an area would otherwise receive if there is indication that local land use policies, permitting policies, or other local regulatory housing policies may be influencing local inflation in rents.” In its comment letter, NAHRO suggested that HUD take the following course of action:

1. Use the methodology HUD used in FY 2023 to calculate RFIFs for FY 2027;
2. Make no changes to RFIFs in FY 2026 using an additional factor;
3. Do not adjust RFIFs in 2027 based on a factor that would discount or mark up RFIFs based on a local jurisdiction’s policies that impact housing supply; and
4. If considering making adjustments to individual RFIFs in FY 2027, look at factors that may add costs to the operation of a voucher program and apply a markup to the RFIF for those agencies.

RFIF Methodology to Use

In its letter, NAHRO suggested that HUD use the methodology it used to calculate RFIFs in FY 2023. In that year, there were not large shortfalls and subsequent changes to the RFIF methodology— justified by pandemic impacts to housing markets—no longer apply. If the Department chooses not to use the methodology it used in FY 2023, NAHRO suggested that the Department consider a methodology that trends forward per unit costs (PUC) or a methodology based on modified operating cost adjustment factors (OCAFs). Any modified OCAF methodology should make adjustments for higher insurance costs, higher staffing costs, and costs for maintaining buildings.

In its letter, NAHRO strongly discouraged the use of additional factors in the calculation of RFIFs in either FY 2026 or FY 2027. The primary reason for not using these factors to discount or mark up RFIFs based on a local jurisdiction’s policies that impact housing supply is that this will not give some housing agencies enough funding to support their families resulting in the loss of housing for some families. Arbitrarily reducing RFIFs will also hinder the use of project-based vouchers contributing to fewer new units being built. Additionally, these factors will not incentivize the creation of additional units through incentivizing the creation of streamlined regulations or policies as housing agencies do not have control over regulatory policies that would impact housing supply (e.g., land use policies, permitting policies, or development approval policies).

Increasing Housing Supply

The comment letter noted that if the Department wishes to increase housing supply, there are certain steps that it can take. First, the Department should focus on implementing the provisions of the recently passed 21^st Century Road to Housing Act. Second, the Department should work with Congress to increase the project-based voucher (PBV) portfolio cap to 50%.

Modifying RFIFs with Factors

If the Department were to insist on modifying the RFIFs with certain factors that mark up or discount values, then the letter offered some suggestions. NAHRO recommended that HUD mark up RFIFs in instances where policies may add costs to the voucher program. Examples of these instances may include the following: 1) Agencies using small area FMRs (which may increase costs in the short to medium term); 2) Agencies promoting moves to areas of opportunity; 3) Agencies increasing success rates of voucher holders; and 4) Agencies with high household rent burdens. NAHRO noted that this is a non-exhaustive list and there may be other instances where a RFIF may need to be marked up.

Other Ways to Improve RFIFs

NAHRO suggested other ways that the Department could improve its RFIF methodology. First, NAHRO suggested that the Department could set a floor for RFIF reductions from year to year to help mitigate rapid financial shocks to the voucher program. Second, NAHRO suggested that HUD should consider allowing upward adjustments to RFIFs in instances where OCAFs may exceed the RFIF. This would help ensure that voucher funding would not be disproportionately used to fund project-based voucher developments.

Statutory Authority

Finally, NAHRO also noted that HUD may lack the statutory authority to create factors that mark up or discount the RFIFs. Statutory language in appropriations bills state that an “inflation factor” must be created. Arbitrarily increasing or decreasing the RFIF would seem to fall outside the definition of an inflation factor, which typically tracks additional cost increases. NAHRO urged HUD to follow the law.

The letter also provided answers to several questions asked by HUD.

NAHRO’s full comment letter on the RFIFs can be found here.

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